Foley Automotive Update

Key Legal Insights from Foley’s Automotive Team

Analysis by Julie Dautermann, Competitive Intelligence Analyst

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AUTOMOTIVE KEY DEVELOPMENTS

• Foley & Lardner partners Vanessa Miller and Alejandro Gómez Strozzi were among the speakers at the 24^th International Congress of the Automotive Industry (CIIAM 2026) held September 29–30, 2026 in Mexico City.
• September 2026 U.S. new light-vehicle sales are expected to increase 2.2% year-over-year for a SAAR of 16.1 million units, according to a joint forecast from JD Power and GlobalData. Third quarter 2026 new-vehicle sales are projected to decline 0.5% YOY.

• Asian automakers are on track to collectively account for over 50% of U.S. new-vehicle sales for a second consecutive quarter in Q3 2026, supported by a broader selection of hybrid vehicles and passenger cars. The Detroit Three are projected to fall to a record-low 36% combined market share in Q3 2026, as they prioritize higher-margin SUVs and pickups over sales volume.

• According to a new report from former “Car Wars” Bank of America analyst John Murphy, the 2026 through 2028 model years are “the worst three-year new-product drought on record.” The shortfall of new models is attributed to the ramifications of U.S. automakers’ abrupt pullback from EVs. Murphy also predicts that gas-electric hybrids will account for 34% of U.S. new-vehicle sales by 2030.

• Global new-vehicle sales in 2026 are forecast to drop 4.3% YOY to 88.3 million units, due to ongoing sales declines in China and market uncertainty stemming from conflict in the Middle East.
• Chinese Tier 1 suppliers are a growing competitive threat to parts makers in a number of regions, according to commentary from the CEO of Bosch North America.
• Senators Bernie Moreno (R-OH) and Elissa Slotkin (D-MI) postponed a fast-track U.S. Senate vote on legislation that would permanently ban Chinese vehicles from the American market to allow more time to secure the support of an additional senator.
• Rising transportation costs are expected to impact “virtually all corners of the U.S. economy,” according to a report in The Wall Street Journal. Prices are rising as conflict-zone diversions drive up ocean freight costs, record diesel prices trigger surcharges, and stricter Trump administration enforcement reduces the pool of truck drivers eligible for commercial licenses.

• Under the final rule issued by the National Highway Traffic Safety Administration on September 28 “substantially recalibrating” the Corporate Average Fuel Economy (CAFE) program, automakers are expected to achieve a light-duty fleet average of 34.5 miles per gallon by 2031. This compares to an average of 50.4 miles per gallon required by standards finalized under President Biden.

TRADE/TARIFFS

• Foley & Lardner LLP partner Gregory Husisian was highlighted in International Trade Today analyzing recent developments in enforcement under the Uyghur Forced Labor Prevention Act (UFLPA).
• The fourth round of U.S.-Mexico trade discussions originally scheduled for the week of September 21 was postponed, and a new date has not been confirmed.
• Mexican President Claudia Sheinbaum proposed amendments to the country’s customs law that could significantly increase scrutiny of declared values for imported goods. Sheinbaum submitted the proposed amendments to the Chamber of Deputies as part of the government’s economic package for 2027. 
• Following last week’s summit between President Trump and Chinese leader Xi Jinping, the U.S. and China agreed to extend their existing trade truce for two months, and revealed a plan to lower tariffs on approximately $30 billion of “non-sensitive” imports from each country. The nations intend to meet twice more this year for continued discussions.
• U.S. Customs and Border Protection (CBP) confirmed that Consolidated Administration and Processing of Entries (CAPE) Phase 3 will launch on October 6, 2026. Phase 3 covers refunds of IEEPA duties on certain finally liquidated entries for importers that have filed protective actions at the Court of International Trade.
• The Journal of Commerce reports the CBP has started purging importers of record who provided insufficient or inaccurate information, as part of a broader initiative to understand import supply chains.
• The Office of the United States Trade Representative (USTR) is accepting comments through October 29, 2026, for its annual report on significant foreign trade barriers affecting U.S. exports, services, and foreign direct investment. The USTR seeks input on barriers that include state-owned enterprises, anticompetitive practices, subsidies, duty evasion, circumvention, and transshipment.
• President Trump threatened to impose additional tariffs or trade restrictions against European countries over Canada’s planned associate EU membership, calling the move a “hostile act.” In addition, a recent presidential memorandum directed agencies to remove Canadian goods from government contracts, citing barriers to U.S. companies seeking access to the Canadian government market through a “Buy Canadian” policy.
• President Trump signed a Russian sanctions bill (H.R. 5334) that grants the president new authority to levy tariffs on the top buyers of Russian crude and natural gas. The law also extends the Iran Sanctions Act of 1996 through 2031. The measure had received bipartisan support, even as certain lawmakers opposed it due to concerns the president could misuse the new tariff authority.
• The U.S. Department of Commerce preliminarily determined that a type of compacted graphite iron brake drum imported from China was developed to wrongfully evade duty orders on such products from the country.
• China expressed opposition to the European Union’s reported request for a voluntary cap on Chinese hybrid vehicle sales at roughly 15% of the EU market, citing a violation of World Trade Organization rules.
• The Trump administration is reportedly preparing tariffs on memory-chip imports to spur investment in future U.S. production. The tariffs would likely raise costs for American companies that depend on Asian suppliers, intensifying pressure from a global chip shortage driven by the AI buildout.
• More than 200 importers, exporters and transportation groups urged the USTR to extend the suspension of Section 301 tariffs and fees on Chinese-linked ships before the current one-year suspension expires on November 9.

OEMs/SUPPLIERS  

• Ford F-150 production was halted for several days at the Dearborn Truck plant and the Kansas City assembly plant due to an unspecified supplier issue.
• Honda is reportedly considering Ohio for the site of a new $2.5 billion U.S. plant that would produce hybrid vehicle models.
• Hyundai plans to invest $500 million in its Alabama manufacturing operations to relocate Tucson hybrid production from South Korea to Montgomery, and expand production of engines and hybrid components.
• MP Materials is on track to begin shipping rare earth magnets from its new facility in Texas to GM by the end of this year, fulfilling a supply agreement the companies signed in 2021.
• Sales of U.S.-made vehicles in Canada declined by nearly 20% in the first half of 2026 compared to the same period last year.
• Chinese automakers including BYD and GAC are reportedly searching Europe for production sites ahead of expected local content rules that could be implemented in the region next year. The European Commission’s proposed Industrial Accelerator Act would establish local-content and low-carbon requirements for products purchased through public procurement, public auctions, or subsidy programs. Chinese brands accounted for a record 11.7% of new-car sales in Europe in August.
• Mercedes is reportedly considering $911 million in labor cost cuts in Germany to prevent the potential closure of two plants.
• Unifor and Stellantis remain at an impasse over the automaker’s proposed sale of the idled Brampton Assembly plant in Ontario to defense contractor Roshel. This follows expiration of the collective agreement on September 20.
• Toyota estimated it could cost up to $6.4 billion annually across its group companies and certain suppliers to support factory modernization, logistics automation, and installation of 400,000 humanoid and non-humanoid robots beginning in 2028.
• Boston Dynamics has opened its Robotics Metaplant Application Center at Hyundai Motor Group’s Georgia Metaplant, where it will train humanoid robots for manufacturing tasks. A Hyundai Motor subsidiary since July, Boston Dynamics will support Hyundai’s initial plan to deploy 25,000 Atlas robots across its global plants in the coming years.
• On September 17, Lockheed Martin announced it had received the first delivery of mission-critical components produced by GM Defense for the PAC-3 Missile Segment Enhancement (MSE) interceptor missile. According to analysis from Tomorrow’s Affairs, the initial delivery demonstrates that GM Defense can produce the required components to Lockheed’s specifications, and the next series will help to indicate the volume GM can consistently ship each month.

AUTONOMOUS TECHNOLOGIES AND VEHICLE SOFTWARE

• Recent analysis from PwC demonstrated that artificial intelligence investment patterns differ sharply between OEMs and suppliers. Suppliers, representing roughly 20% of AI investment, pursue a focused approach with programs concentrated on “modular, component-level innovations such as perception sensors for ADAS, AI-enabled control units, and AI-enabled manufacturing tools that integrate with OEM systems.” OEMs are deploying approximately 75% of automotive AI capital in a wide range of areas that include large-scale AI training infrastructure, fleet-wide data platforms, autonomous driving, software-defined vehicles, supply chain, vehicle development, and enterprise functions.
• Self-driving technology company Aurora Innovation expects to have more than 30,000 autonomous trucks on the road by the end of 2030, according to updates during its 2026 Analyst and Investor Day.
• Chinese autonomous-driving software developer Momenta will partner with Dongfeng Stellantis Automotive Technology (Wuhan) Co., Ltd. to develop advanced driver-assistance technology for new Peugeot and Jeep models in markets that include China and Europe.

MARKET TRENDS AND REGULATORY

• The Wall Street Journal reports a growing number of automakers are adopting “minimum advertising pricing” rules for dealerships, as more consumers express a preference to avoid haggling and amid greater scrutiny from the Federal Trade Commission on dealerships’ advertising tactics.
• After the U.S. House of Representatives passed the AM Radio for Every Vehicle Act, Senate Commerce Committee Chairman Ted Cruz (R-Texas) and Sen. Edward J. Markey (D-Mass.) urged the Senate to advance the measure, which would require automakers to install AM radio tuners in new vehicles.
• Deutsche Bank predicts copper prices could increase by 50% from current levels to reach $10 a pound by the second quarter of 2027, amid historic stockpiling by the U.S. and China.

HYBRID AND ELECTRIC VEHICLES

• Tesla won the lead supplier role in a 2,500-truck battery-electric Class 8 order from a new shipper coalition, ZET SCALE, that will deploy the trucks across ten freight hubs over the next few years.
• California Governor Gavin Newsom signed a law requiring manufacturers to provide suggested retail prices for incentive-eligible, all-electric medium- and heavy-duty trucks by January 1, 2027.
• Nissan intends for hybrids to be its “primary powertrain” in North America by 2030.
• Although Canada limits Chinese EV imports, Chinese-made batteries, motors, and other components reportedly continue to enter the market in significant volumes—and can represent up to half of a vehicle’s value.
• Michigan reduced its incentive package for battery maker Our Next Energy after the company lowered hiring targets and shifted its focus from EVs to defense and rail customers, according to a report in Crain’s Detroit.
• China’s Geely revealed new EV charging technology that can recharge a battery from 10% to nearly full in under five minutes. The technology uses an AI model co-developed with StepFun to predict battery temperatures and adjust charging power.
• According to data from the European Automobile Manufacturers’ Association (ACEA) released on September 24, hybrid-electric models accounted for 36.6% of the total EU market in the first eight months of 2026, while battery-electric vehicles (BEVs) represented 21.7% and plug-in-hybrid electric vehicles (PHEVs) were 10% of the market.